Business is Personal (Finance)

Virtualization cost savings

2010-05-07T07:11:00Z

I have several new articles in the hopper with various degrees of progress but work has interfered with their completion in the past two weeks. One project that came up was the replacement of hardware. One of our older servers died and its brethen bought at the same time (more than 5 years ago) are sure to go soon. But instead of replacing these 4 servers with 4 new ones, we decided to take virtualization to it's next step and replace them with just 2 machines. (Our IT manager was not yet comfortable with a single machine replacing all 4 of them.)

After using Linux KVM for about 6 months, I am fairy comfortable with it and quickly replace all the old servers. Instead installing and customizing the same software packages 4 times on 4 different machines, I only had to make a single VM running all the necessary software. Then I cloned the image 3 times and modified the UUID plus MAC address to be slightly different. Voila, 4 virtual machines up in a flash. Unexpected high volume? I can keep a few more cloned images on other machines configured for KVM and launch them whenever needed.

It's pretty clear virtualization decreases IT administration costs. But what about performance? After all, having 4 virtual servers that run dog slow does not help. So while browsing the Linux KVM news, I came across news reporting Redhat recently released their Windows BlockIO drivers (Windows 2003/2008, Windows XP) under GPL. Ordinarily, a VM must emulate the network and disk controller devices -- however, using VirtIO and BlockIO, a custom driver is installed under the guest OS. I/O is then handed to the Linux KVM hypervisor to execute at the host OS level -- which greatly improves performance -- instead of being emulated. I was excited to test it out of course and installed both the network and disk driver on a single production VM. (We have many production servers so no big deal if 1 crashes due to untested software.) I was shocked after a day of production transactions showing the the Windows VM running 30%+ faster than native WIndows execution on the same hardware!

I don't know the exact reasons why a VM is so much faster. It could be because Linux's I/O and process scheduler is much better than Windows' so with Linux backstopping everything, the normally inefficient Windows transactions get rescheduled by Linux. Whatever the reason though, this changes the equation for the way we should manage our data centers. Our data centers have been built-up over time. We started with a few machines and kept adding and adding as we signed up more customers. With all this accumulation of hardware, we now have a full cage (2 racks) in a San Francisco data center and a full cabinet in Sterling, VA. We pay $2700/mo for the cage+extra power and $2300/mo for the cabinet+extra power. In total, it costs $5000/mo -- $60K/year -- to host our production servers.

Now let's say we threw out all our existing hardware and replace them with 2 monstrous servers. Something like a 4 x Opteron 6136 system (32 cores total) w/ 64GB of memory and 20 hard drives could replace all our existing hardware in both data centers. The cost of this server would probably be about $12K+ fully decked out so we would be looking at an initial outlay of $25K. In return though, we could downgrade our hosting storage to 1/3rd cabinets at $1200/mo. 2 data centers at $2400/mo comes out to $29K/year -- cost savings of $31K! This means a single year of operation would pay for this change not including the savings on IT administration.

The only real hesitation is now we have only a single machine that can fail at each location. It feels riskier so we might use instead 2 "lesser" machines per data center or adding a 3rd data center within driving distance (say Sacramento). In the past, the enterprise software from VMware was very expensive but with KVM supported under Centos Linux 5.4 and the VirtIO/BlockIO drivers available for Windows, it's getting to the no brainer territory to embrace virtualization.

Inline skate analysis paralysis

2010-04-23T18:11:00Z

I love skating. Most forms of exercise are rather blah to me but put some wheels on my shoes and I can go for hours slicing through the wind. Especially nice is the endorphin rush when I'm near the end of my return trip and I put in extra effort to head home at top speed for as long as possible. To top it off, San Francisco (where I grew up) is a great place to skate. (See the end of this post for some well-worn skate paths.)

My original skate from the early 90's was a hard-boot model made by Ultrawheels (no longer in business). I really liked this model due to comfort but because I skated almost everyday for a decade, I destroyed this skate from heavy usage. (I certainly got my money's worth at $100.) Particularly damaged was the was the heel brake -- I snapped the brake arm right off the boot from countless high deceleration heel stops. (I semi-patched it by sawing off the damaged sections and screwing on parts from different skates.) But with the rest of the skate warped, bent and degraded, it wouldn't have lasted much longer.

Due to the good experience of my first skate, I picked up another Ultrawheels. Unfortunately, the entire industry had moved from plastic boots to padded boots with laces. While the fit was nice, it was nearly impossible to tie laces tight enough. Most people need more ankle-support so that is where the buckle is. For me though, I liked the inverse with the boot tight on the cuneiforms and I could never adjust my skating style to the new industry skate styles. Because of this, my skating time went down drastically as I'd actually get huge blisters on any extended run.

MY KINGDOM FOR A SKATE

Now that I'm in China, I have been thinking of getting another pair of skates again. While I walk 3 times per week to the central shopping district (distance: 1 mile), I will need a more active lifestyle to stay healthier. There are outdoor exercise machines in the condo complex but they don't motivate me. Knowing myself, skating would be the only exercise I could stick with long-term.

I first tried looking for skates in China but it's a lost cause. Inline skates might sell for as low as 50rmb (less than $7.50) for close-out models up to 350rmb ($50) for copies of U.S. brands. Unfortunately, none of them fit me. No retailer stocks size 10.5 (CN 45) for that 1 in 100,000,000 Westerner who lives here and wants to buy skates locally. I even tried Guangzhou (a city with many expats) but I could only find a 9 (CN 43). My foot profile simply does not match what merchants keep inventory for so my only option is to pick up another pair of skates the next time I head back to the U.S.

To that end, I've started researching what inline skates are available. Knowing my skate style, my preference is for 2 or 3 buckles on the boot with at least 1 at the cuneiforms. (Most skates simply have a velcro strap at that area and it's just not tight enough for my tastes.) After a few days of getting reacquainted with the state of inline skates, the following current year* models meet my criteria:

DBX Velocity Molded Inline Skates 2010 - $50
Roller Derby Pro Line 900 - $65
Roller Derby Spartan Z 9.9 - $115
Newron Touron 4.11 - $200
Rollerblade Fusion X5 - $200
Rollerblade Twister 243 - $220
Rollerblade RB 10 - $250

* I found previous year models that met my criteria. But since they were prior year models, only close out sizes (really small) were available.

ANALYZING THE CHOICES

I immediately tossed out DBX Velocity . It apparently is a store-brand for Dick Sporting Goods and they don't offer replacement brake pads for their own brand! Otherwise, it would have been a possible option at $50 since the money at risk is so low.

Roller Derby Pro Line 900 looks close to my skate from almost 20 years ago but the wheelbase is too short for larger wheels. It comes with 76mm wheels -- you could probably fit in 80mm wheels but nothing larger. Now Spartan Z 9.9 -- that seems to be right up my alley. Not too expensive, 90mm wheels, light boot but with a buckle where I need it. The only problem? Nobody only stocks anything other than 6-9 and 12. Every online store I checked stocked the exact same sizes! I guess online stores don't carry inventory at all. Instead, everything is shipped direct from the manufacturer and everybody just picks up a commission. (Why don't the manufacturers directly sell instead, I don't know.)

Newron Touron 4.11 looks very visually appealing but the wheel-base is designed for off-season ice hockey training so it skates differently from the standard inline. The maximum wheel size it can take is 80mm limiting the top speed. Of course, the price is a bit higher than what I had hoped to pay.

The three Rollerblade options are all hard-boot urban skates which means instead of cheap plastic, it's heavy-duty construction designed to take plenty of damage. Fusion X5 and Twister 243 both have small wheelbases with maximum 80mm wheels. RB 10 comes with 90mm wheels and could be used as a recreational skate. The main problems are weight and of course price.

Given the current state of my thinking, I'm hoping Roller Derby has a few size 11s in their production queue in time for my U.S. trip. Spartan Z 9.9 is definitely my number one choice but I'd be willing to live with Pro Line 900 given for *my* uses, it will work as well as the $200-$250 skates from Newron or Rollerblade. Unfortunately, if there are no sizes available, then I have no choice but to spend more money.

AN UNEXPECTED CONTENDER?

Partly resigned to the $200-$250 price range, I came across something rather different: LandRoller Mojo . The videos on LandRoller's site and Youtube are very exciting. With 2 big wheels at an angle, I'd give up speed for the ability to go over cracks, grass, dirt, rocks and quad-like manueverability. Hopefully because it skates more like a quad, I don't need the same lower boot buckle support I need for inlines.

Now I'll be realistic -- I doubt I actually *need* to skate on grass but the thought of it is just cool. Basically, this is gadget-envy for skates. Rolling around with skates that look completely different from what everybody is used to will attract plenty of attention. And deep inside, we all want to feel that moment of glory -- our 15 minutes of fame. For an extra $100 (after choosing faster bearings) over a Spartan Z 9.9 (assuming size availability), I basically am giving myself a psychological reward. Perhaps letting the brain muscle take a rest once in while will keep the focus stronger where it counts -- at least this is what I'm telling myself. :) Now if only the Newrons or Rollerblades are available in my size, there would be no price difference so LandRoller is far more compelling.

Let's see how things play out. There is a retailer in Palo Alto so I can certainly head down there during my U.S. trip to test the fit.

SAN FRANCISCO/PENINSULA SKATE ROUTES

Route 1

Start at AT&T Park, skate along the Embarcadero through Fisherman's Wharf, Fort Mason, the Marina Green and Crissy Field to beneath the Golden Gate Bridge. On more adventurous days, head up the hill to the toll plaza and cross the Golden Gate Bridge. (The west lane is supposed to be for biking while the east lane is for foot traffic -- I usually took the bike lane and except for a few bikers who didn't want to share with fellow human-powered wheeled transportation didn't have any hassles.)

Distance: 11 miles round-trip, 13.5 miles w/ GGB crossing

Route 2

Start anywhere at Sunset Boulevard and head south to Lake Merced. One loop around Lake Merced and then west toward the Ocean towards the S.F. Zoo. Go back up north along the Great Highway (48th Avenue) until Ocean Beach. Then up through Golden Gate Park on JFK drive all the way through the Panhandle to the Haight-Ashbury area. The way back usually would be short-cuts on city streets.

Distance: 13.5 miles complete loop

Route 3

Start at Coyote Point in Burlingame and head south along the bay. The path goes straight all the way to Redwood Shores. If desired, you can cross city streets to skate along some of the smaller parks in the area.

Distance: 11.5 miles round-trip

Route 4

Do Route 3, return to your car and find out you've locked your keys inside the car. Skate all the way back to San Francisco for spare keys to get your car the next day. Ugh. Luckily, new cars all use electronic locks so if you use your FOB to lock your doors, it's nearly impossible to make this mistake.

Distance: 21.5 miles (unfortunately, mostly uphill and against the wind -- should have taken public transportation back)

Route 5

Follow the Midnight Rollers where ever they go.

Downside of being an ocean away

2010-04-19T17:53:00Z

There's a Sarah Brightman song with the lyrics:

There's an ocean between us.
You know where to find me.
You reach out and touch me.
I feel you in my own heart.
More than a lifetime
Still goes on forever.
But it helps to remember
You're only an ocean away.

Back in SF, we rented a 600sf condo because it was a minute away from the office and 5 minutes away from the data center. At $1800/mo, it by no means was cheap but compared to larger places in the area at $3000-$4000/mo, it was what we had to make do with. In the beginning, our servers and software was held together with duct tape so being close was imperative. Not only did we need to keep our production servers up for our customers to access but our office machines were just as important for us to process data during the night and over the weekend. Because we didn't have the money for the expensive enterprise hardware and software, we had to compensate with extreme dilligence and I routinely made midnight runs to troubleshoot computers.

As we've grown though, we've dramatically improved our infrastructure. Multiple servers, multiple data centers, real-time multi-master replication, local load balancing, global load balancing, remote power cycling, super-redundant RAID, tested admin tools, better release process and so on. If we didn't periodically make stupid brainfarts, hitting the 99.9999% uptime benchmark would be within our reach.

Once in a while though, we still have problems with our office servers which for cost reasons are not at the same infrastructure level as our production machines. Last weekend, it was a power outage that lasted longer than our UPSes could handle and one important server was stuck at a 3ware BIOS warning screen. Ordinarily, I would be driving towards the office ASAP to check on the servers in case we had pressing data processing jobs still in the queue. But being an ocean away, all I can do is pull up some Sarah Brightman, chill out and wait for the IT staff to come in on Monday.

To be honest, it's a change I need to adjust to. Even being business owner, work is still just work -- it's not life-or-death. Considering how the poor track record of our competition, the panic is mostly in our own minds -- we're competing against memories of ourselves in startup mode. And yes, the IT staff came in Monday, got the computers up within an hour and no real issues arose from the one day downtime.

Maximizing job hunting returns

2010-04-18T17:47:00Z

In the past 4 years, we've done most of our new hires using Craigslist. The position we've hired the most for is Data Control Analyst and each time as the economy worsened, the response rate went up. Here's how each hiring round went:

2006
Job ad posted: 2
Responses: 40 (20/ad)

2008
Job ad posted: 3
Responses: 90 (30/ad)

2009
Job ad posted: 1
Responses: 103 (103/ad)

As you can see, when times get tough, the competition gets tougher. This is one of these corollaries in life -- good times never seem to end but when it rains, it pours. It's bad enough to lose a job but then to have to compete with a gaggle of candidates with the dagger of foreclosure or eviction hanging over your head -- it's a veritable country song waiting to happen.

From the employer's view, it takes a lot of work to read resumes, evaluate and screen applicants, reply to them, do phone screenings and then finally bring them in for face-to-face interviews. Obviously, the stakes are often even higher for the job hunter, Hence, it is in both side's best interest for the applicant to bring something extra to the table to make a resume rise to the top of the pile. And the one thing that I find consistently missing from the hundreds of job applications we've received (not just for these positions but many others) is work examples.

Back in the days when I was a job hunter, I prepared beforehand for my interviews by putting together a portfolio. Ordinarily, when you hear portfolio, you think of artists bringing along a big pouch showing off their past work for prospective clients. Well I decided to use a similar tactic. For all my major projects -- work, academic and personal -- I either included the documentation I wrote for those projects or wrote a new summary specifically for the purpose of job hunting. Then put together nicely in a binder with table of contents, summaries and separators as if I was making a full-blown presentation asking for venture capital money.

So when it came time for an in-person interview and we started talking about about my past experience, I handed over my 500-page portfolio and matched up physical evidence to what was on my resume. The interviewers did not have to dwelve into every job to make sure the claims I was making on my resume were true. In addition, I got an extra chance to show off writing skills and thinking out of the box (using an art world practice in the white collar world). Suffice it to say, I batted 1.000 on job offers each time I had the chance to use this tactic.

I still had to get by the resume filtering though. Since resumes should never be more than 2 pages maximum, I saw no way I could show off my portfolio before the in-person interview stage. Hence, there were many jobs I did not get a callback from because somebody made a decision that the 50 words on somebody else's resume were better than the 50 words on mine. In today's Internet world though, it's trivial to include a detailed portfolio with your resume. Put your work online -- whether demo website, documentation, photos, screenshots or writeups -- and include the URL with your resume. I would no longer bring the 500-page monster anymore either. Instead, I'd have single page summaries (with the URL pointing to the full details) for each project where it would be possible hand out copies to each interviewer.

I can tell you from experience screening job applicants that this can be a huge edge because out of the hundreds of resume -- many for technical positions -- a grand total of ONE applicant listed a URL that showed off his prior work. I'm pretty sure he went to the top of many resume lists because he turned us down before we even got to the interview stage.

I hate mosquitoes

2010-04-10T18:24:00Z

About a month ago, I wrote about the 2nd worse thing about living in China -- the north/south wind combos that make floors and walls drip with moisture. Number 1 on that list is mosquitos. Living in San Francisco, mosquitoes were rare with the weather continually in the 50s to 70s -- especially in our living quarters in a skyrise condo building where we kept the windows regularly closed to block out the noise and dust from the Bay Bridge. In this part of China though, it's hot, muggy and the constant rains create pools everywhere for mosquitoes to breed. Many natives here seemingly have little response to mosquito bites but for myself and my daughter, we get serious welts everywhere. Hence, we've spared no expenses in trying to defeat these blood-sucking insects.

First on our list were mosquito screens for all doors and windows. The initial period after installation seemed very effective. For about 2 weeks, we were rather mosquito free. Then mosquitoes starting coming in again. We hunted around and found holes and slots that were not airtight -- for example, the glass cutout for the kitchen exhaust pipe was wider than the pipe. After patching, we'd get a respite for a day until these insects found new places to come in. It's possible the poor deck door design mentioned in the north/south wind posts is where mosquitoes are coming in still. If I had to do it again, I'd still get them installed as there is some reduction and the larger insects (wasps, bees, moths) are fully kept out.

Cost: 1250rmb total, Score: 3/5

Our next attempt was to use repellents. We tried sprays, clips, heated scent devices -- all totally useless.

Cost: 10-20rmb, Score: 0/5

These electric zappers use lights to attract insects near and then fans to suck them into an electrified grill to electrocute them. When lots of mosquitoes were coming in, these zappers routinely caught 1-3 mosquitoes per day. Unfortunately, the surviving insects still wreaked heavy damage on us. We even attempted placing a few zappers right next to our bed but that was rarely effective. And after a few months of usage, the fans and lights on these machines started to break down.

Cost: 50rmb per zapper, Score: 2/5

My next tactic was to close the bedroom doors every night and hunt down all bugs with an electrified racket before going to sleep. For 2 months, this tactic was very effective. With 30 minutes every night, I could pretty much eliminate every mosquito from the bedrooms. Perhaps natural selection works that fast as I soon began to miss bugs. Somehow those who survived evolved to prefer hiding places I was not accustomed to look for.

Cost: 30rmb, Score: 4/5

After the winter cold spell ended, the blood-suckers returned to torment us and we finally put mosquito nets around the beds. This turned out to be the most effective method of protection during sleep. Sometimes when the kids move around too much and open up gaps in the nets, mosquitoes can sneak in but they rarely can sneak out so they are easy to catch afterwards. The only other failure scenario is sleeping next to the net where the mosquito can bite you through the net.

Cost: 100rmb per bed, Score: 5/5

In conclusion, the most effective solution is bed mosquito tents. The price is not bad either -- we paid 85rmb for a queen-size net and 130rmb for a king-size net. Obviously, it does not handle non-sleeping activities so when I'm at my computer desk at night, mosquitoes will periodically come after me even though I'm still awake. For those bugs, I keep the electrified racket on my desk right next to my trackball and I've gotten pretty good at swatting any that dare come close.

2009 tax extension filed

2010-04-08T22:13:00Z

As I begin writing, there are 7 more days before the traditional tax due date. I've known my rough tax estimate since January but I finally took the time to download every statement to enter into TaxAct. For a few bank accounts, the 1099s are undoubtedly at my U.S. mailing address but it was easy enough to look through the online statements and add up the interest. I am missing the details for my rental investment expenses but since I don't qualify for taking deductions for losses this year, those missing details won't change what I will owe for 2009. I do owe money so I have to file for an extension and pay my bill by April 15. (Those due refunds have plenty of time.)

My first inclination was to do it online. The IRS does allow FreeFile for extensions regardless of income. But when I went to look at the requirements, I was a bit puzzled. I used TaxAct last year to eFile but I can't remember if I made a PIN or not. I checked out TaxAct but it only had eFile for Form 4868 versus 2350. Then my mom called me about other matters and mentioned she was heading to the IRS the next day. Since Form 2350 is quite simple to fill out, I decided I would print, sign, scan and email it to my mom for her to hand to the IRS. In addition, I asked her to write a check for me to cover the minor dollars and I would immediately repay her using online bill pay. The toughest part was running to my office (3 flights of stairs down, 6 flights up) to use the printer, bringing the document back home for my wife to sign, heading back again to the office to scan it and one final trip home to call my mom. Whew ... that was some nice exercise.

California taxes will be easier for me to deal with. California automatically grants filing extensions until October 15. Just like for federal taxes, I have to pay what I likely will owe by April 15. However, the FTB website has options for both ACH deduction and credit card payments -- no need for tax programs or eFile partners. Good thing because my state tax bill is much bigger than federal due to the lack of an overseas deduction and I did not want to ask my mom to write such a big check for me.

I'm planning to be back in the U.S. in the next few months. One of my tasks will be to go through all my tax documents and applicable receipts to scan those that I am missing. With that info on hand, I will be able to generate and file my final tax return -- hopefully with no extra money due.

Foreigner's Finances comment summary

2010-04-06T18:34:00Z

Austin over at Foreigner's Finances was gracious enough to send some traffic to this site when he interviewed me in his continuing series on people living overseas. The link to my interview is at: Interview with a location-independent family man in China

Now I only recently started following his site so I was a bit behind on his topics. To catch up, I went through all his entries and am now writing a "comment summary" from the perspective of what I've seen in China.

You shouldn't save money like a young Chinese woman

From the western-world point of view, this looks just like the average American consumer about to embark on a life of spending. But if you know more about what's happening in China, the story is not as cut-and-dried. Let's look at the heart of the entry:

Many still live with their parents, but probably don't realize they're going to be for a long time because one day they'll have a family of their own but they won't be able to afford it.
The basic assumption in this statement is flawed. In Chinese culture, children always live with their parents. Austin guessed the easy part -- the unmarried live under their parents' roof. The part missing is married women move into their husbands' parents' home. Moving out to start a family is a rare phenomenon. Instead, their parents or grandparents watch over their children while they work. And as time passes, they in turn watch over the elder generations later in life. In effect, life changes often don't alter living expenses. (The only exception is saving for schools -- while the government provides free public education, access to the better schools require either testing in or buying in -- parents may be optimistic but they also are realistic.)

Two other government-driven factors come into play:

In the past, only men would inherit their parents' assets. But with the 1-child policy, many only-child women will in the long run bring their parents' assets into their marriage.
The government is doing a lot of saving for everybody by the act of pegging the CNY to the USD. When manufacturers sell goods to the west and earn USD, their deposits get swapped for CNY created on-the-fly. The government then buys U.S. Treasuries with this money. So as long as the economy is export-driven, the government in effect saves 30% for everybody. The money isn't ear-marked for any social-net program -- instead, it's used to keep the economy up at full employment.

Obviously, if a young Chinese female would do additional saving on her own, that would be fabulous. But what would they put their money in? Remember that there is not a long history of investing in China. Compound interest works greats but only if you have the investment options available. China's stock and housing markets are new, schizophrenic and probably in gigantic bubbles due to the government restrictions that funnel an increasing Chinese money supply internally. And savings accounts pay almost no interest while the inflation rate for the past 30 years is nearly 6%. Basically, the only investing the Chinese truly have any faith in is starting a business but that's not something everybody has either the contacts, experience, personality or capital to do.

So with high inflation and lack of investment options, they might as well spend money while it's worth something and while they can enjoy it. For now, the Chinese really don't need practice to switch into ultra-saving mode. Those who don't spend usually come from poorer backgrounds and give money to their parents to help out before they marry off and become part of a different family. Now you (the reader) still shouldn't save like a young Chinese woman because you most likely are a resident of the western-world.

4 Japanese Personal Finance Gripes

Banking in China is similar to Japan. When you open an account, you get a passbook. However, they also sign you up for online access and even give you a USB encryption key. This means no matter how infected your computer gets, hackers cannot steal the USB key to access your accounts. Now online access doesn't really do that much because the economy is still mostly cash. The only value is being able to re-allocate money into sub-accounts -- "checking" where you can withdraw money from an ATM and "savings" where money earns interest but on CD-like schedules instead of daily crediting. Right next to every ATM machine are machines to print fees, withdrawals and automated payments to your passbook.

Credit cards are readily available but acceptance is not widespread. The granny sitting on the street selling vegetables certainly won't accept CCs nor will most of the local merchants. Only those upscale businesses that routinely get out-of-town customers will accept credit card payments. Interestingly enough, my condo developer did accept credit cards so somebody looking for a 2nd home overseas could have plopped their high limit credit card down and bought a place with a swipe of a card. And with little credit card acceptance, debit cards are not every useful. Everybody has an ATM card to withdraw cash -- I can't think of anybody with a debit card.

Change is funny story. There are coins but I have never seen them used except at Guangzhou Metro machines. Paper "coins" also exist but only the largest chain stores will use them. Instead, local merchants always round up goods to the nearest dollar. If you buy some bread and hand them a 10rmb bill, they might give you 3rmb back plus a small cookie. If you buy some medicine at the pharmacy, you'll probably get a few band aids thrown in to pad the bill up.

Cost of the iPhone 3G in rural Japan

Last year, iPhones were not available in China. This meant people either had to go to Hong Kong to buy them or have friends/relatives in other countries buy and waste money on 2-year service plans. This drove prices through the roof to about 10000rmb or nearly $1500. The iPhone 3Gs is now approved for sale in China and sells for about 5500rmb ($800). The price is still high because it is not being subsidized by a phone plan. Buy the phone and then pop in your standard prepaid SIM card.

Comparing grocery prices in Japan to America

To be honest, I have no idea what individual items cost. We buy mostly from street vendors and the food is so cheap I don't even bother keeping track. One time, I made dinner for 3.75 people at a cost of 10rmb ($1.50) -- this included fresh mushrooms, broccoli and fish (talapia). We shop at western-style supermarkets primarily for milk and packaged drinks -- I suspect both are at about U.S. prices.

Do I send money home? Dealing with exchange rates

In the short term, exchange rates are not an issue for moving money back and forth as China pegs the exchange rate using their vast budget surplus. Other countries (Thailand, Britain) have tried to peg their currency before but got overrun by the hedge fund investors (George Soros). Over the long term, the macro-economic pressures cannot be ignored. To fight inflation and to satisfy growing demand for better living conditions, the CNY will appreciate in value. It'll just be done by the government over an extended period little-by-little. This means I have the opposite problem -- I need to bring more money over while I can still get a discount paid for by the Chinese government.

The Japanese post office savings and mail

Not much to comment other than to say there's a China Postal Savings Bank also. Guess Asian countries are big into combining these services although most people prefer China Construction Bank or Agricultural Bank of China due to more ATMs.

Guaranteed Insurance Contracts

2010-04-02T20:59:00Z

The usual investing advice is don't mix up insurance with investing. The fees are high, the restrictions many, the fine-print hard to read. Basically, there are far better alternatives ... at least in the U.S.. An American investor can buy an ETF with a 0.10% expense ratio paying little or no brokerage commission. That is amazing because just up north in Canada or across the Atlantic in Europe, the low expense options are 10 years behind. And in China, it's 30 years behind as all funds -- whether index or not -- have loads. (The loads range from 1.5% for index funds to 2.5% for actively-managed funds.) That's assuming you want to invest in the schizophrenic Chinese stock market at all.

For this reason, annuities and guaranteed insurance contracts (GICs) are more popular in China than in the U.S. Despite the stories in the news about house wives and taxi cab drivers lining up at brokerages to dabble in the stock market, I have yet to run into anybody with a significant stock portfolio. Those who do want to earn more money than what their pitiful bank accounts pay often put their money into investments offered by insurance companies.

That isn't to say the insurance offerings are simple to follow either. For example, a bank official handed me a pamphlet with the following offering:

Contribute 10,000rmb annually for 10 years
Withdraw 1000rmb annually for 15 years
After 15 years, you will have accumulated 12,500rmb in interest
After 15 years, you will get a maturity bonus of 70,500rmb

The average person would understand "contribute X and have Y after Z years" -- simple enough to add up the numbers to get just RMB returns. But any more complex analysis is touch since the complexity makes it hard to compare against offerings from competing insurance companies or even the same company. Luckily, I have a spreadsheet that lets you input all the factors in and backtrack the return rate until the ending balance matches.

After collecting up a bunch of brochures and having bankers/brokers walk me through the numbers, here's a run-down on a few GICs:

  Company        Broker   Contribution  Withdrawal  Ending Balance  Rate
  -------------  -------  ------------  ----------  --------------  -----
  China Taiping  AG Bank  1  x 10,000   none        5yr  / 134,000  6.03%
  China Taiping  AG Bank  10 x 10,000   15 x 1000   15yr / 183,000  7.13%
  China Taiping  private  5  x 10,000   15 x 500    15yr / 112,000  7.32%
  China Taiping  private  10 x 10,000   20 x 1000   20yr / 303,000  8.32%
  China Taiping  private  20 x 10,000   30 x 2000   30yr / 847,000  8.14%

The interest rates look good but we have to factor in both risk and inflation. Since 1990, here are the inflation numbers for China:

  1990-2008 = 5.0%
  2000-2008 = 2.6%

By comparison, the numbers for the U.S.:

  1990-2008 = 2.8%
  2000-2008 = 2.8%

China Taiping is a state-run enterprise so they have the implicit backing of the Chinese government. If any developed country had China's balance sheet, the rating agencies would rate their bonds as quadruple-A. (The U.S. is triple-A even with our horrendous debt.) But since it's not a democratically-elected government, there is a risk that the government may simply repudiate any such debts in times of crisis. That risk brings the credit rating down to perhaps the muni bond level where defaults have periodically occurred.

With our comparison defined, we can pull the numbers for Vanguard's bond options:

  Intermediate Term Treasury     6.3yr   2.86%
  Intermediate Term Tax Exempt   6.3yr   3.75%
  Intermediate Term Bond Index   7.5yr   3.79%
  Intermediate Term Inv-Grade    7.1yr   4.06%

  Long Term Treasury             20.2yr  4.64%
  Long Term Tax Exempt           8.8yr   4.65%
  Long Term Bond Index           22.5yr  5.24%
  Long Term Inv-Grade            23.6yr  5.85%

If you look at the above numbers, something will jump right out at you. Long Term Tax Exempt has a maturity of 8.8 years compared to 20+ for the other long term bonds. This makes using only TE funds as our basis for comparison convoluted. Luckily, the Bond Index seems to have matching rates at intermediate maturity so we will use Bond Index as the proxy for long term.

Comparison #1 using China Taiping 5-year GIC

Yield 6.03% - Inflation 2.6% (3.43%) <--> Yield 3.74% - Inflation 2.8% (0.94%) ==> + 2.49%

At 2.5% higher real rates, this China Taiping GIC is far more appealing than any intermediate bond fund or 5-year CD. Until Helicopter Ben let's interest rates go back up, fixed income in the U.S. is a real turn-off.

Comparison #2 using China Taiping 20-year GIC

Yield 8.32% - Inflation 5.0% (3.32%) <--> Yield 5.24% - Inflation 2.8% (2.44%) ==> + 0.88%

For long-term fixed income, the gap is much smaller at about 0.9%. Going by this numbers alone, I would not put money into a 20-year GIC as the extra return may not compensate for unknown risks. However, the Chinese government maintains an artificial peg to the U.S. Dollar and the consensus is the CNY is 20%-40% undervalued. While there's no way the CNY will simply be unpegged in a flash, over a long period I expect the CNY to slowly rise as the people of China demand more internal spending versus throwing surplus money back into U.S. Treasuries. If it gained back 20%, that would boost the 20 year return to 10% annually -- 12.5% at 40%. For this reason, this long-term GIC looks quite tempting.

Remote office technology

2010-04-01T05:52:00Z

With office build-out done, my next task was to implement the necessary technology to integrate with the main San Francisco office. Step 1 was easy -- I put together detailed specifications for my desired hardware and got quotes from the local computer stores. One vendor not only got me the right equipment but also delivered and installed everything (including the server cabinet).

Afterwards, I spent roughly 2 weeks installing and finetuning software for optimal remote office integration.

Internet

In China, you can get internet from the telephone company, cable company or the mobile phone companies.

From the telephone company, the internet is standard ADSL using Point-to-Point Protocol over Ethernet (PPPoE) This means almost any operating system, router or firewall will properly support it. You can also get T1 internet for roughly 1200rmb/mo.

From the cable company, the hardware looks just like what you might see from Comcast. Unfortunately, they require special Network Address Translation (NAT) software that only runs on Windows XP or Vista. Upon plugging in the cable modem, you get an internal IP address in the 172.x.x.x range. The custom software then logs in and the NAT box at the cable company central office opens up access for you. This setup not only means you must use a Windows XP OS but some applications and services do not work behind NAT without special configs.

From the mobile phone companies, you can get an USB dongle that provides 3G internet access. Again, as far as I know, the software they provide only works with Windows XP or Vista as a friend running Windows 7 could not get it to work. In addition, you pay for 3G internet usage by the minute.

Because we run primarily Linux at the network and server level at our company, ADSL was the no brainer choice. I thought about T1 service but with the main bottleneck being the underwater pipe that crosses the Pacific ocean, it would have been wasted money.

Virtual Private Network (VPN)

To create a private computer network on top of a public transport (the Internet in most cases), the standard technology is Virtual Private Neytworks (VPN). And the VPN solution we have standardized on is OpenVPN. It is an open source project based on Secure Socket Layer (SSL) or the same software and algorithms that is used to encrypted web transactions. The price was free and the implementation easier than the other two major competitors -- Point-to-Point Tunneling Protocol (PPTP) and Internet Protocol Security (IPSec). Both PPTP and IPSec use far more complex software and depend on GRE packets meaning they either must run at the firewall or the firewall must have special support for it. By comparison, OpenVPN uses a single port (either TCP or UDP) which allows for straightforward firewall configuration.

Now buying a hardware firewall with built-in VPN would have been easier to implement but costlier and less flexible. Because we have multiple data centers across the U.S., we have multiple VPN connections from each point-to-point. We then can change traffic routing dynamically if one connection goes down. While it will be slower to zig-zag to a farther data center first before heading back to your closer one, at least the connections can still be maintained. We looked at hardware firewalls and none of the cheaper firewalls (under $10K) had the flexibility to support dynamic routing over multiple VPN networks. So for our requirements, it was better to use a software solution running on rock-solid hardware.

There is a problem in OpenVPN with either slower remote connections or asynchronous upload/download transfer rates -- or a combination of both. Certain protocols like SMTP (email send) and IMAP (email read) make all OpenVPN traffic slow down to a crawl. This means when I download big attachments off our email server across the world, the VPN link seems to "lock" up for about 30 seconds. However, it does resume after a while. Disabling compression alleviates some of the problems but not all. I've googled up a few links saying it might be a packet fragmenting issue but have not narrowed it down yet. Moving our SMTP server to our local network solves half the problem but moving IMAP to our remote office cannot be done without making an email sub-domain. It's annoying but not fatal. (If anybody has similar experience with OpenVPN, please post a reply with your observations and solutions.)

Services

Besides seamless network connections between offices, every office needs the typical range of network services. The following is the list implemented and the packages used:

Firewall - iptables
DHCP - dhcpd
Name Services (DNS) - bind
File Sharing - samba
Login Authentification - samba (domain controller)
FTP - vsftp
Web Server - apache
Email - exim

Hardware Virtualization

In the past, people would separate out services into separate computers to avoid having a single point of failure. The current practice is to use a single beefy machine who's primary purpose is to host other "machines". The overall technology is called Virtual Machines while emulating hardware to host operating systems is usually referred to as Hardware Virtualization. By using HVM software, separate servers can run under a single host as if they were separate machines.

This means for the China office, the server hardware consists of a single machine with RAID storage running Linux KVM. I then created separate VM guests running Centos 5.4 to handle internet/firewall/vpn and office services. Not only does this save on computer hardware costs but it makes maintenance far easier. If the hardware ever died, all I'd need to do is get any machine running a newish version of Linux with KVM and copy over the VM images. (KVM even has an option to freeze and transfer over a live VM guest -- however, you really need 10gige for images to transfer fast enough.)

Note that even the internet connection is hooked up to a VM guest -- the VM host exposes the underlying network interfaces as bridges and routes traffic from/to the VM guests. In theory, I could use this technique to host a Windows XP VM running the custom cable modem or 3G usb dongle software with internet sharing enabled. Then I would add a default route on my router VM to send traffic to the Windows XP VM. This would allow my remote office computers to share a single internet connect even though those cable/3G alternatives require custom software.

Communications

For communications, I first experimented with using Ekiga. From my home laptop, it worked fine but from the new office, I'd see error messages about ports being blocked. While I could have found out the ports to unblock, this probably meant only a single computer behind a firewall could connect to an Ekiga server on the outside. However, since Ekiga uses open standards, I was able to install OpenSER into an internal server to act as our own Voice over Internet Protocol (VOIP) server. While this solution worked well at a technology level for voice and video, the practical issue of putting Ekiga on every machine was hard to overcome. When calling internal staff, we'd have to use Ekiga but then use regular phones for external communications. Hence, we limit Ekiga to only video conferencing.

For voice communications, the San Francisco office continues to use regular phone lines but our China office uses Skype with the annual pre-paid U.S. calling package. For about $60 annually per line, employees at our China office have unlimited outbound calling. For another $30, we can give them U.S. phone numbers for inbound calling.

The majority of our communications though is via text messaging. Instead of using the typical instant messaging clients that connect one person to another, we instead have an internal Internet Relay Chat (IRC) server where everybody "chats" in the same "room". We have 2 public rooms, one for work topics and one for non-work topics. Instead of calling people and possibly interrupting whatever they're doing, we usually leave questions and comments on IRC for them to get around to when they have time. In addition, because these messages are public to all employees, everybody can contribute to the discussion if they have knowledge on that topic.

Printing/Scanning

For printing and scanning, I obtained a Brother MFC-7840N. (The Brother link shows the 7840W which includes wireless -- only the wired version is sold in China.) It is the typical multi-function laser printer that does printing, scanning and faxing. The key I liked most was the ability to scan to PDFs and upload to a FTP server. Most MFC competitors only support scanning to email. This means the printer actually sends the PDF to an outside email server and then you pull that file off your email back down. If your email server close by on a fast connection, this system works ok but with an email server across the Pacific, it is a total hassle. Instead, I looked for MFCs that could scan directly either to FTP or SMB. I found a list of several and this printer was the best and cheapest option available.

Work flow

The final piece of the puzzle is the custom work flow application we have developed internally. By breaking up work into steps, the China office can look for tasks and projects that have hit the "ready to be tested" stage, do their work and either send back for more changes or mark as done. Without such an application, the work flow would be much more intrusive requiring far more coordination between offices.

Summary

All-in-all, it took me roughly a week to put together the initial software packages and then another week of monitoring and fine-tuning the VPN failover scripts. By sticking with open source solutions where ever possible, the cost of the technology was minimal. Now some people will say "open source is only free if your time is free". I've found though that working with open source not only keeps my skills sharp but gives me the practice needed to be prepared for real emergencies. In addition, knowing all the nitty-gritty details gives me a full understanding of the technology versus simply parroting a white paper. And it is the rapid pace of technology that makes remote offices possible even for small companies. A decade ago, a small company would not have even considered a remote office much less an overseas one due to work flow and integration issues.

Vacation but don't invest in Europe

2010-03-24T18:22:00Z

Back in late 2007, I re-evaluated my asset allocation and came to the conclusion that European countries were in just as bad shape as the United States in terms of debt and delusions. The only diversification would have been due to currency factors. Since then, I have been reducing my EAFE holdings -- it has gone down from the traditional 30% of portfolio to 13% as of my post on 01/25/2010.

So this past Monday, I sold another EAFE chunk (and moved it into bonds) bringing my holdings down to 11.5%. Market gains had brought it up to about 14% since January and I was feeling uneasy about the debt news from Europe. It seemed strange that Greece is in financial disaster (can't pay back debts, cooking books) but yet the market just shrugged it's shoulders and continued to climb. Perhaps everybody was too pre-occupied with health care reform?

Well the next shoe dropped today. Portugal was downgraded by Fitch and investors finally blinked. Markets overseas are down 2% in Europe, 1.5% in Japan and 1% in Emerging Markets compared to 0.5% in the U.S. While it is only 2%, it always feels good to make a lucky change before the market moves.

With my latest transactions, my asset allocation now looks like:

Equities                       63.1%
  Domestic             27.4%
  EAFE                 11.5%
  Emerging Markets     11.6%
  REIT                 12.0%
Bonds                          27.7%
  Nominal              19.3%
  Inflation-Protected   8.4%
Commodities                     9.3%
  Commodity Futures     5.3%
  Gold                  4.0%

My 401K is set to auto-rebalance tomorrow and I suspect I will be right at my 60/30/10 benchmark afterwards.

Standing on shoulders

2010-03-24T05:38:00Z

My wife and I have been involved in several businesses and probably will continue to be so for many years to come so when I came across Foreigner's Finances: The Entrepreneur Test, I thought to myself "eh...I should ace this test". However, my brain immediately stopped at question #1.

#1 I believe that I am firmly in control of my own future success or failure (TRUE/FALSE).

Now Americans have an image of themselves as independent trail-blazers -- and in those either self-employed or running a business, this attitude is even stronger. (This hubris comes through most strongly in tax discussions -- "everything we have and earn is from our blood, sweat and tears and the government has no right to it!") But yet when I think back on both my business dealings and investment moves, control is not the word I would use.

I started my current company with 2 other partners and had another join us later. It was the perfect blend of different talents -- business, marketing and technology. We all met as employees in a previous company (ABC Inc) where the parent company (XYZ Corp) was bought out but ours was killed off after the acquitisition. So knowing we would all be soon out of a job, somehow we got the crazy idea to go into business together.

When we first started, our focus was not on health care technology. Instead, we were in the discussion phase to build internet-based insurance applications. Meanwhile we were doing consulting working to keep the income flowing during this bootstrap mode. However, XYZ Corp had not kicked us out of their building yet so we not only had free office space but were still plugged into their network and email systems.

One day, we saw a global email announcing a new internal product. Being quite curious, we downloaded it and it turned out to be total crap. We sniffed our noses and said "man, we can build a much better web-based product ... well why don't we?" Two months later, we had alpha version 1 of our current flagship product and we called up our contacts at XYZ Corp to rag on their attempt. Then we casually dropped "oh...and type in X.X.X.X in your browser". Now this was back in the late 90s -- the dotcom craze was in full swing but the focus was on consumer-oriented websites so to see a business application on the web just knocked our contacts' socks off. Before not too long, XYZ Corp became our first real customer and we did an about face on our business plan.

Why XYZ Corp let us stay in their offices is another story by itself. (We did eventually move when they expanded and needed even our small space.) They could have simply closed ABC Inc down and that would have been that. Instead, they sold the corporation to us for $100 in order to take a multi-million dollar capital loss write-off. But the only way that write-off would have been allowed by the IRS is if we then turned the corporate shell into a successful business. Hence XYZ Corp had very good incentives to give us consulting work and buy our products. We did good work of course but the extenuating tax circumstances meant they were willing to give us a sweet-heart deal to improve our survival odds for at least 5 years. After all, what's an extra $75K a year compared to millions in tax deductions?

In the investing arena, luck has also intruded often for the better.

While working for ABC Inc, I put the max I could in the 401K plan with 25% allocated T.Rowe Price Science and Technology (PRSCX). XYZ Corp continued run the 401K plan until such time all participants could be notified about the plan shutdown. The plan finally was terminated in the middle of 1999 and I transferred my money into an IRA holding blue chip stocks. Just a few months later, the Dotcom bubble would burst. PRSCX proceeded to drop from $77 to $10 and is still is only at $23 after a decade. Losing a job from the XYZ Corp buyout saved me from a mind-boggling 70% loss. Instead, I got out with 24% return per year in PRSCX.

When picking mutual funds, I decided Janus Worldwide (JAWWX) would be the choice for my international allocation. I picked this fund of course based on past performance -- after all, past performance sells. ;) But when I started filling out the application to invest in the fund, I realized my "research" was wasted as Janus Worldwide was closed to new investors. At that point, I decided to go with Janus Overseas (JAOSX) thinking "eh...same company, probably the same investment strategy". Not even close -- during the decade I held JAOSX, it outperformed JAWWX by 300%.

When our bank froze our company credit line in late 2007 due to a technicality (wrong FEIN on the loan documents), I stopped my planned investments and sold off a big chunk of stock to make a personal loan to my company. We all know what happened next in 2008 -- Bear Stearns, Lehman Brothers, AIG, whoops. We did finally get a totally new credit line before Bear Stearns hit (whew) and started a repayment schedule on my loan. Of course, getting the money back bit-by-bit then allowed me to dollar-cost-average right into the market during the nadirs.

Hence, I would answer FALSE to question #1 in the entrepreneur quiz. It is the rare few who are in control of their future successes as it's a wild roller-coaster ride. Instead, I would say:

1) The successful entrepreneur continues to get back on after falling off.

2) The successful entrepreneur is willing to try different rides and choose the one most suited for themselves.

One final note on serendipity. There is one event that trumps all and that's having the opportunities of a U.S. citizen during this period that perfectly suits my skills. Before my parents emigrated to the U.S., relations between the U.S. and China were frozen. It took Nixon's visit to normalize relations and re-open the door for legal immigration. When viewed in this scope, everyday I am in China reinforces how luck has been 99% of my success and all I do now is incrementally work on that 1%. After all, even if I was working an average American job, I'd still be living a lifestyle better than 99% of the world.

One final shout-out for Al Gore. Without his efforts for government funding to develop what is now the Internet, some original founders say we would be a decade behind today's pace. Again, being in the right place at the right time standing on the shoulders of others.

Health Care Reform

2010-03-23T08:10:00Z

The big news in the U.S. is of course health care reform. Nancy Pelosi (who actually represents my old district) held tough on her party members in the House and made it happen even when it seemed Obama's administration might have been willing to water down the bill. Here is the New York Times summary on the bill:

How the Health Care Overhual Could Affect You

Some things I like: removal of lifetime limits, non-cancellation for getting sick, higher insurance costs, requiring people to have insurance.

Seems like a strange statement to want higher costs but there's no way to legislate rationing or cost control so the backdoor solution is to increase costs to move people into higher deductible plans. Once people finally understand what it means to their bottom line, the free market has a better chance of reducing costs than any directives from above. Besides, the reality is we already pay these extra costs from taxes and outrageous bills since hospitals can't turn away the unisured. Might as well move the cost to where it can be directly linked to the overall health care system.

In short, it's really the only direction that is possible unless the Republicans are willing to put forward a plan to fully abolish health insurance. I'm willing to embrace either extreme -- move either to socialized health care or everybody only has catastrophic insurance.

China Office Build-Out

2010-03-22T18:11:00Z

When my company started more than a decade ago, we started as a few guys working out of a rented condo unit in San Francisco's SOMA district. Back then, SOMA had a reputation for being multimedia gulch due to a lot of internet/media start-ups located in the area and everywhere you looked, there was an internet company in a loft hacking away.

While researching office possibilities in China, I thought immediately back to our company beginnings. As I looked around more, the idea of a condo office went to the top of my list. In Taishan, there are no office buildings except for those housing the major utilities in the city -- for example, power authority, cable company, phone company, etc. Other white collar settings are smaller retail bank and insurance offices but beyond that, almost all industry in Taishan is either retail, manufacturing, construction or transportation. This meant my office choice was limited to either a retail store or a residential unit.

Hence during our house hunting phase, we had to keep the office at the back of our minds. Because the plan was to follow San Francisco time, we would hire employees in China to work during the hours of 10PM to 6AM. While Taishan is comparatively crime free, erring on the side of caution is always a good policy when the risk-reward is minimal. That meant any place we chose as home needed to be a quick and safe commute to work.

Fortunately, the place we liked best for a home also had store fronts and smaller condos (800sf to 1000sf) in the same complex available for purchase. I briefly considered picking a store front. Long-long-long term, no business is forever and hence a store front might have better rental possibilities in that scenario. However, the size would be 75% smaller than a residential unit for the same price. In addition, there would be more security issues since a store front is exposed/open to the outside public. Because forecasting so far into the future is a wild guessing game, we chose the more sure route with a 960sf residential condo. At 1932rmb/sm, the cost was 172,000rmb or $24963 USD.

Now this unit was nothing but concrete so our next step was to hire a contractor to design and build out the office. Because the design was from scratch, I was able to specify a server cabinet located in a private office with cat5e wires to 9 different stations in the office. We could even knock down existing walls to make a fat L for the main area (convertible to living room plus dining room). 2 smaller rooms would be private offices (convertible to bedrooms). After negotiating with the contractor, we agreed on a price of 62,000rmb (697/sm) or $9104 USD. (Delivery price was discounted to 61,000rmb upon reviewing the workmanship.) Combined with the purchase price, my company's China office was right about $34K USD.

While I use the term "company office", my wife and I personally financed the unit for expediency's sake. Setting up a foreign corporation in China would have taken who knows how long and who knows how much. Since we don't make sales to Chinese customers, everybody told us to avoid this route as the annual taxes and fees would have been just a waste of money. Hence for official purposes, my brother-in-law is both the landlord and employer. My company contracts with him at net costs for rent, payroll and expenses. In turn, he defrays 2000rmb/mo in our cost of living in China.

Stay tuned for more about the office launch (furnishing, computers, hiring, training, work schedule).

Moving to the repair phase

2010-03-18T01:08:00Z

Ok, the topic title was an attempt at humor. :) After reading Jacob's post on the end of simplifying at Early Retirement Extreme, I decide write a quick post about some simple repair work I just did. You might think here in China where every cheap disposable good is produced, people will replace instead of repair. However, cheap is a relative term. An American household might not balk at replacing a widget for $10 but that same $10 for a Chinese household would be several days of ordinary but filling food. So in every Chinese city, you will find street vendors who will repair clothes, shoes, jewelry, bikes, electronics and so on.

Now when the funnel on my son's Thomas Train suitcase broke off, we took it to a few vendors to look at but they all turned down the work. My guess is the issue was time. Anything they can run through their sewing machine, they are willing to dedicate a minute to fix and then charge accordingly for the work -- say 1rmb to 5rmb. However, re-attaching the funnel requires sewing by hand. While they could quote accordingly -- 25rmb for 15 minutes of work -- few here would pay that price so they just don't even try. In the end, I used needle and thread to fix the suitcase. It looks like a simple job but fabric and plastic was very tough to work with. I bent the needle several times trying to push it through the material.

My next task was to repair my son's bike helmet as the clasp was broken. I immediately tossed out the idea of glueing the prong back on. The pressure that is applied each time the clasp is opened and closed would have broken the glue bonds. Replacement of the clasp was the only fix -- I first scrounged for backpacks or suitcases with unused clasps but couldn't find anything roughly the same size. Next on the processing was to buy another one but since there isn't a local Jo-Ann Fabrics, I was unsure where to get it. After asking around, we were directed to a street where a dozen sewing vendors have semi-permanently set up shop. Scrounging through their collection of buttons, hooks and clasps, we found something that would fit OK for 2rmb. The only remaining issue was rethreading the straps underneath the decorative plastic takes the dexterity of a liquid metal terminator. After a few futile attempts, I cut nice holes in the plastic and threaded the straps over -- it looks unusual but oh well. All-in-all, saved about 18rmb -- 20rmb total for a new helmet ordered online -- which is not a lot of money but that's resources used for one less item in this world.

Doors and windows followup

2010-03-17T21:17:00Z

A few days ago, I wrote about the ground fog and condensation that strikes during the months of February and March in Southeast China. To see what we could do about it, our contractor came by for a look.

First they took the windows off the rails. Inside the frame overlap are ridges on both sides for inserting weatherstrip sealing. Of course, the condo developer decided to skimp on the pennies it would have cost to put it in -- pretty lame but I guess not unexpected. After putting the inserts in, I could detect a noticeable difference in air/wind blockage.

But after putting in the same treatment for the living room deck doors, we noticed the doors actually were not wide enough! With all panels touching the door frames, the doors could not close fully leaving a 2cm gap in between them. Basically, every time we've closed the doors, it would pull the side panels away from the door frame. By comparison, the kitchen deck doors overlap fully. It looks like the manufacturer simply produced doors to the incorrect specifications -- at least for our unit. The contractor inspected the doors some more and decided it would be possible to take apart the door panels and reassemble them 1cm wider. This took an hour and at a cost of 100rmb for labor.

The bathroom doors were adjusted to get a tighter fit but I suspect I will have to buy weatherstrip stops on my own and glue them onto the frames. They also filled the door slits with silicone sealant. I may also put a layer of tape over that section if I can find something that looks decent enough.

We will have to wait to see the verdict on these changes.